Will new economies like ride-sharing and business models like MaaS kill nowadays public transport?

Over the past few years ride-sharing and mobility as a service (MaaS) have become hot topics. Here is a brief insight, why these new business models are inevitable and extremely important for future public transportation.

In 2008, according to numerous researches, for the first time in history, half of the world’s population lived in cities. It has been estimated, that by 2030, 6 out of every 10 people will live in an urban area and by 2050 this figure will rise to 7. It means, that a bit more than 30 years from today, 70% of world’s population lives in urban areas. According to United Nations this is not just happening in US and EU, but also in Asia and Africa.

Heavy urbanization puts tremendous pressure on serving the population and increasing the volume of public transportation services. As an example, the use of public transport has reached its highest levels in decades, according to UITP. However, according to McKinsley & Company, many cities have developed their urban core even before the invention of automobile. Cities are in an evolution. We see more and more car-free zones, permits or to drive in city centres are sometimes auctioned etc.

Therefore, new modes of transportation are inevitable to serve the growing population. Changing needs and current infrastructure cannot serve individual cars in those volumes in high density areas. Needless to say, that the new generations are also less car-oriented, as owning the car is not a privilege or status symbol anymore. Even worse, many younger generations look at the car ownership more as a liability as they live global and extremely mobile lives. So, the growing need for public transportation with mixture of convenience services through different modes of transportation is well needed.

In order to tackle these issues, the new economies and new business models should not be taken as a threat to the traditional public transport, but looked as an opportunity to lessen the need for heavy infrastructural investments by municipalities. Furthermore, they should be looked as an opportunity to provide multifaceted transportation options in world’s growing cities.

Traditional public transport will remain and conventional ticketing in public transport will also remain, but more co-operation and interconnectivity in our technology-rich era will provide better opportunities for travellers, as well as for public transport operators. One of the new business concepts is MaaS, but it still needs proof as a working model, not as a technology. From the technological point of view, it is an account based ticketing solution. The ride-sharing as a new economy and mode of transportation will also not kill the traditional industry, but help the cities to cope with exponentially growing need for transportation.

Both of those popular trendy services are helping to provide better transportation for our growing cities. Ridango has been a frontrunner in public transport ticketing technologies and will continue to help transport authorities and operators to take full advantage of modern solutions possibilities.

This article has been written by Erki Lipre, CEO of Ridango